Tuesday, 4 December 2012

Herbalife Side EffectsSome
people experience unpleasant side effects when using various Herbalife
products. These are described and addressed in this article for your
safety and well-being.Bloating:

If you
experience bloating, try changing the portion size to reduce this
feeling. Enjoy healthy snacks during the day and smaller meals to assist
your digestion. If you are using the shake mix as a meal replacement
you may want to reduce the portion size or frequency.Dry Mouth: Some
people report that their mouth is dry after black or fruit tea. Detox
products often produce thirst so you can try increasing your intake of
water. Dryness from using the shakes can be caused by acid reflux since
it contains guar gum and psyllium husk. These have expanding properties,
which can cause reflux. Guar bean is high in protein and oil and guar
gum is used worldwide in many beverages, foods and supplements. In
significant quantities, guar gum dehydrates the body and can cause some
serious side effects. However, it is regulated by the FDA who only
permits extremely small quantities of it in food. Guar gum in the shake
mix is used to emulsify or bind the particles and has been determined to
be of insignificant quantities.Heart Palpitations:

Palpitations
may be from caffeine sensitivity. The tea does have caffeine in it so
you could either stop using the tea or eventually you will get used to
caffeine and the palpations should recede. The shake mix does not
contain any caffeine.In the nineties it was found that Ephedra
caused increased heart rate and Herbalife discontinued using Ephedra in
any of its products.Upset Stomach, Headache and Fevers:

In
the first few days, many years of accumulated toxins and waste in the
body begin to be expelled. Diarrhea, headaches, fever or nausea can
arise.These are temporary symptoms and will subside whether you
continue the diet or not. The discomfort is not very common but happens
to some people. Once you are detoxified you should feel great however.
The body has toxins or free radicals surrounded by fat molecules, and
when burning these fat molecules, the toxins are released into the
bloodstream for elimination. They circulate through the body and are
filtered out by the kidneys and liver. This can take up to 2 weeks.
Areas where toxins and pollutants are expelled from the body can display
reactions. You can first use a detoxification program to cleanse your
system before starting the weight loss program if you wish.Unpleasant-Smelling Urine or Perspiration:

This
is another possible reaction to the body cleansing that is not caused
by the products, but the waste you are cleaning out. The products are
working just as they should.Allergic Reaction and Blocked Sinuses:

People
who are very allergic to fish need to know that some Herbalife products
contain fish oil. See a medical specialist to determine if this is an
allergic reaction. Sinuses are especially sensitive because they are
soft tissue. Sinus irritations should clear in 1 to 3 weeks but if they
get worse, discontinue using the product and consult a medical
professional.Malnutrition:Beware
of nutrient deficiency when losing weight. The Herbalife ShapeWorks
program recommends that along with the 2 shakes and one healthy meal,
you should add the Multivitamins and Cell Activator to ensure that you
are getting enough nutrition. Cell Activator helps increase your
nutrient absorption from food.Stimulants:

Caffeine
in green tea is not the same as in coffee. It is slower-acting and has a
calmer quality. But if you feel too stimulated try half a cup instead
of a whole cup for a while.Swollen Legs:

This
might indicate an allergic reaction to an ingredient in the Herbalife
products. Please show your doctor the product labels and ask his advice.
It would be best to discontinue using the product until you know what
the cause of your swelling is.Stomach Acidity:

If you
are using Cell-U-Loss, try discontinuing it and see if that reduces your
symptoms. If so, then Cell-U-Loss is not for you. If acidity persists
when you are not taking it, there is some other cause. Cell-U-Loss
contains 3 ingredients which may be causing the acidity: Apple Cider
Vinegar, Vitamin C and Iron. It also contains herbs that have diuretic
properties such as couch grass and corn silk extract.Pregnancy:

Total
Control (the metabolism booster) carries a warning to not be used by the
pregnant, lactating (or those that want to get pregnant). Rapid weight
loss and stimulants during breastfeeding can release too many toxins
into your blood stream and thus into your milk. This can cause a
decrease in your milk supply and be unhealthy for your baby. Avoid the
stimulants in Total Control and the Herbal Tea, which contain caffeine.
Herbalife products have nutrition labels that show warnings to guide
women who are pregnant, nursing or who may become pregnant.Rashes:These
are the most commonly reported side-effects that happen when the body
is de-toxifying. Redness, blotchy skin and irritation can arise. Your
skin being the largest organ, has the most cells to repair and also
discharges toxins. It takes about 2 weeks to cleanse the blood stream
and during this time the departing toxins can be irritating. Exercise
produces sweat and will release toxins that can irritate the skin.
Herbal Aloe Soothing Gel can provide symptomatic relief.Hair Loss or Breakage:

Formula
1 Nutritional Shake Mix has been shown to improve skin, hair and nail
growth. If you experience hair loss early in your weight loss program,
this is because damaged cells are being repaired or replaced. When
beginning a weight loss program, your body will target the most damaged
cells. Hair usually has the oldest cells and is thus the first target
for renewal. Hair soon becomes healthier than before so you need not
worry about this.General Detoxing Effects:It is
very well known that at the beginning of a diet or fast there may be
some adverse side effects. These usually subside within a few weeks
however. If you detoxify for a few days using plain water, fruit or
vegetables you will also experience some side effects. When we have
better nutrition, or when toxic substances such as coffee, tea,
chocolate, tobacco, salt, and pepper are discontinued, amazing changes
take place. Our bodies discard the lower grade materials and tissues to
make room for newer, healthier ones.Weight Gain:

An
ideal weight-loss rate is between 3 and 5 pounds per week. If you lose
weight gradually and are getting proper nutrition, it will stay off.
Moderate exercise like walking is necessary to get the fat burning
process going. Adequate hydration (drinking water regularly) is
essential to flush the toxins.Do not try to stop any Herbalife side
effects by taking drugs. Either let the healing take its natural course
or stop using the product if you experience an allergic reaction.

Company Perspectives:

Herbalife is united with a single purpose&mdashø capitalize on
the core strengths that have raised Herbalife to the worldwide status
it enjoys today and, through strategic decision-making, to lead
Herbalife toward greater success in the future.
Key Dates:

Key Dates:

1980:

Mark Hughes establishes Herbalife and begins selling diet aids out of the trunk of his car.

1982:

The FDA sends a 'Notice of Adverse Findings' to the company.

1985:

Herbalife is labeled one of the fastest-growing companies in the United States by Inc. magazine amidst negative publicity.

1986:

The company officially takes on the name Herbalife International and goes public.

1988:

The company continues aggressive international expansion into Japan, Spain, New Zealand, Israel, and Mexico.

1991:

With the help of international business, sales reach $191 million.

1993:

Sales reach $700 million.

1995:

The company introduces a line of personal care products.

1997:

The firm again becomes subject to negative publicity when Clint Fallows, a former distributor, files suit against Herbalife.

1999:

Hughes attempts to take the firm private.

2000:

The buyout attempt falls short and, in May, Hughes dies unexpectedly.

Company History:

Herbalife International, Inc. markets and distributes a broad
spectrum of more than 150 herb- and botanicals-based weight management
and dieting products, cosmetics, and general health and nutrition
products, through a worldwide network of more than one million
independent distributors in 50 countries. Herbalife products, sold under
a variety of brand names, include the Thermojetics Weight-Management
Program, the Health & Fitness Bulk & Muscle Program, the
Dermojetics herbal and botanical skin care products, the Cell-U-Loss
cellulite-attacking supplement, Colour cosmetic products, as well as
perfumes for men and women under the Vitessence brand name. Herbalife
has thrived despite negative claims against its marketing schemes,
product ingredients, and distribution methods. 'Herbalife uses `network marketing' as a way to describe its
marketing and sales programs as opposed to multi-level marketing,'
according to the company's 1995 annual report, 'because multi-level
marketing has had a negative connotation in certain countries in which
Herbalife does business.' Nevertheless, Herbalife's distribution network
closely resembles the typical multilevel marketing approach--sometimes
referred to as a pyramid scheme--and has been accused of crossing the
line into the illegal endless-chain marketing. Multilevel marketing
remains legal in most states in the United States, with the condition
that the company's sales force of distributors actually receive earnings
by selling products to people not related to the company. In an illegal
endless-chain scheme, earnings are achieved primarily through
recruiting new salespeople into the pyramid. In the Herbalife network marketing plan, potential distributors buy
into the network by purchasing Herbalife products, generally at a 25
percent discount off the retail price, which they may then in turn sell
to others. Once they place orders above a certain amount--ranging from
$2,000 to $4,000--a distributor may become supervisor, at which point
they receive a 50 percent discount on Herbalife products. Distributors
also become supervisors by recruiting new distributors into the network.
They then receive a percentage of each recruit's sales--usually about 8
percent. As supervisors rise higher in the pyramid, their earnings have
the potential of rising dramatically, depending on the number of
supervisors below them. Herbalife distributors are supported by a range of company career and
training programs. Among these are the company's annual distributor
convention, called the Herbalife Extravaganza, which features five-day
intensive training; HBN, a private satellite broadcasting network that
provides training in recruitment and retention techniques, as well as
marketing support and training; bonus vacation programs for top-selling
distributors; and the company's own magazine, featuring testimonials of
success stories by Herbalife distributors and customers. Top
distributors may earn $250,000 per year and more; nonetheless, the
average annual earnings among all Herbalife distributors has been
estimated at $1,500. As independent contractors, distributors receive no
salary or benefits from the company.

Company founder and CEO Mark Hughes, owner of more than 60 percent of
the company, died unexpectedly in 2000, just after failed attempts to
take his company private. American Success Story Beginning in 1980Master salesman Mark Hughes began Herbalife in a Beverly Hills
warehouse in 1980, selling the new company's dieting aids from his car.
Hughes, whose parents were divorced soon after his birth in 1956, was
raised in Lynwood, California, outside of Hollywood. By ninth grade,
Hughes had dropped out of high school. He became involved in drug use
and by the age of 16 was sent to the Cedu School, a private residential
home for emotionally disturbed and troubled teenagers. It was there that
Hughes developed a knack for salesmanship, rehabilitating himself by
selling door-to-door raffle tickets in support of the school. By the end
of his tenure, Hughes had joined the school's staff. Another turning point for Hughes came at the age of 18, when his
mother died due to an overdose of diet pills. As Hughes would tell it,
according to Inc. magazine: 'My mom was always going out and
trying some kind of funny fad diet as I was growing up. Eventually, she
went to a doctor to get some help, and he prescribed ... a form of
speed, or amphetamine. ... After several years of using it, she ended up
having to eat sleeping pills for her to sleep at night. And after
several years of doing that, her body basically began to deteriorate.'
The death of his mother stimulated Hughes's interest in herbs and
botanicals, the use of which had become popular during the 1960s. Hughes
set out to develop a dieting program based on herbal and botanical
products that would enable people to lose weight safely. Before founding Herbalife, Hughes the salesman received another kind
of training when, in 1976, he began selling the Slender Now diet plan
from multilevel marketer Seyforth Laboratories. Hughes quickly rose to
become one of the pyramid's top earners. When that operation collapsed,
Hughes joined another multilevel marketer, selling Golden Youth diet
products and exercise equipment. By 1979, however, Hughes, then 23 years
old, decided to form his own company. Together with Richard Marconi, former manufacturer of the Slender Now
products, Hughes developed the first Herbalife line of diet aids.
Marconi, who claimed to hold a Ph.D. in nutrition, would later admit
that his doctorate was a mail-order certificate from a correspondence
school; nevertheless, Marconi would remain an officer at D & F
Industries, Inc., which would continue to manufacture much of the
Herbalife line throughout the company's history. Also joining Hughes in
the new venture was Lawrence Thompson, formerly of Golden Youth, and
earlier, Bestline Products, which in 1973 was fined $1.5 million for
violating California's pyramid scheme laws. At both Bestline and Golden
Youth, Thompson worked with Larry Stephen Huff--later to become a
Herbalife distributor--who was involved in what Forbes labeled
the 'father of all pyramid schemes,' Holiday Magic, Inc., a multilevel
marketer charged by the Securities and Exchange Commission (SEC) in 1973
with defrauding its distributors of $250 million. The Herbalife plan involved limiting meals to one per day and
supplementing the diet with protein powders and a regimen of as many as
20 pills per day. According to the company, Herbalife was an instant
success, selling $23,000 in its first month and $2 million by the end of
its first year. Hughes, described by Inc. as 'a honey-tongued spellbinder' and 'a tanned and blow-dried California swashbuckler,' and by Forbes
as a 'firebrand preacher,' brought multilevel marketing to a new
height, by taking the Herbalife message to television. Booking two- to
three-hour slots on cable television, including the USA Cable Network,
Herbalife was an early purveyor of the so-called 'infomercial.' The
Herbalife television programs, led by Hughes himself, were, as described
by Forbes, 'full of inspiring testimonials from common people
and resemble[d] old-style revival meetings in their fervor.' At the same
time, Herbalife published its own magazine, Herbalife Journal,
equally filled with testimonials, for which the company reportedly paid
$200 each, from distributor success stories to weight-loss victories of
Herbalife customers. Within a short time, the Herbalife slogan, 'Lose
Weight Now--Ask Me How,' began appearing on buttons and bumper stickers
everywhere. Legal Challenges in the Mid-1980sHerbalife grew rapidly. By 1985, the company appeared on Inc.
magazine's list of fastest-growing private companies. (That magazine
labeled Herbalife's five-year growth 'from $386,000 to $423 million, an
increase of more than 100,000 percent, [as] by far the highest growth
rate in the history of INC. 500 listings.') In that year, the company
claimed more than 700,000 distributors in the United States, Canada, the
United Kingdom, and Australia, bringing annual (gross) revenues of
nearly $500 million. Yet, as early as January 1981, the Food and Drug
Administration (FDA) began receiving complaints of nausea, diarrhea,
headaches, and constipation, which were attributed to the use of
Herbalife products. Herbalife distributors reportedly were instructed to
assure customers that these side effects were the result of the body
purging itself of toxins. By 1982, when the company published that
year's edition of the Herbalife Official Career Book--a guide given to
distributors that contained a full product list and descriptions of the
uses and benefits for each product, as well as advice on building their
Herbalife sales--the FDA took action against the company. Among the complaints leveled against the company was a number of the
claims Herbalife made for its products in the Career Book. The
Herbal-Aloe drink, for example, was said to help treat kidney, stomach,
and bowel 'ulcerations'; and Herbalife Formula #2 was said to be a
treatment for 75 conditions ranging from age spots to bursitis to
cancer, herpes, and impotence. In the summer of 1982, the FDA sent
Herbalife a 'Notice of Adverse Findings' requiring the company to remove
the mandrake and poke root ingredients--both considered unsafe for food
use--of Slim and Trim Formula #2, while finding questionable the
existence of 'food-grade' linseed oil also in the product. In response,
Herbalife removed the mandrake and poke root and promised to modify the
product claims found in the 1982 Career Book. Herbalife was well into its surging growth--and Hughes was riding
high himself, purchasing for $7 million the former Bel-Air mansion of
singer Kenny Rogers, and marrying Angela Mack, a former Swedish beauty
queen--when the FDA released a 'Talk Paper' on its complaints against
Herbalife to the press and public in August 1984. The company's troubles
increased several months later when Canada's Department of Justice
filed 24 criminal charges for false medical claims and misleading
advertising practices against Herbalife. In December of that year,
Hughes went on the attack, filing a suit against both the FDA and the
U.S. Secretary of Health and Human Services, accusing them of 'grossly
exceeding their authority by issuing false and defamatory statements and
by engaging in a corrupt trial-by-publicity campaign against the
company.' In a press release, Hughes said: '[We're] not about to stand
around and let this agency or anyone else issue blatant lies about us or
our products, or to lie down and roll over while they take pot shots at
us. In the five years we've been in business, literally billions of
portions of Herbalife products have been consumed by millions of people.
And we have never been sued or subjected to any formal proceedings by
the FDA.' In the same press release, Hughes also suggested that the FDA
'attack' on Herbalife was inspired by legislation pending in Congress
that sought to regulate the rapidly expanding dietary supplement market.

Although Hughes would withdraw the lawsuit the following year,
Herbalife began to suffer from the negative publicity surrounding not
only its products, but also its marketing tactics. After a still-strong
first quarter, the company ended 1985 with only $250 million in retail
sales. In March 1985, Herbalife itself was charged in a civil suit
brought against it by the California attorney general, the California
Department of Health, and the FDA. That suit, which included Hughes as a
defendant, charged Herbalife with making false product claims,
misleading consumers, and with operating an illegal endless-chain
scheme. At the same time, both the U.S. Senate and U.S. Congress began
investigations into the company, during which time the investigating
subcommittees pursued allegations that Herbalife products had been
responsible for as many as five deaths. While the civil suit was based
in California, the Washington investigations brought the negative
publicity surrounding the company nationwide. With sales stalling, the company cut its workforce--which had reached
approximately 2,000 people--laying off 270 in April 1985, and nearly
600 more the following month. Herbalife distributors were also hard hit,
leaving many with unsalable inventories of Herbalife products and many
others seeing their income drop to nothing overnight. Sales dropped even
more precipitously the following year. Despite repeated vows to fight
the charges against his company, Hughes reached an out-of-court
settlement with the California attorney general's office. Under terms of
the settlement, Herbalife paid $850,000 in civil penalties,
investigation costs, and attorneys' fees. Herbalife also agreed to
discontinue two of its products, Tang Quei Plus and K-8 at FDA
insistence that, although the products posed no safety risks, the claims
made for them by the company would require them to be considered as
drugs under the Food, Drug and Cosmetic Act. In addition, the company
agreed to make further changes to its Career Book, including dropping
claims for its Cell-U-Loss product as a natural eliminator of cellulite.
By the end of 1986, Herbalife posted a $3 million loss. Going Overseas and Back Again in the 1990sHerbalife's domestic sales were at a standstill, so Hughes took the
company overseas to expand its international markets. To finance the
expansion, the company went public in December 1986, merging with a
public Utah-based shell company, which allowed the company to go public
much faster than if it had been required to file an initial public
offering. Hughes became chairman of the new company, now called
Herbalife International, taking 14.8 million of 16.8 million shares of
outstanding common stock. The remaining two million shares went to newly
named director and executive vice-president, Lawrence Thompson. By 1988, Herbalife had moved into Japan, Spain, New Zealand, and
Israel, and soon added Mexico as well. The company's aggressive
expansion forced it to take a loss of nearly $7 million that year, but
international sales built quickly, raising worldwide sales to $191
million in 1991. Meanwhile, domestic sales continued their slide,
reaching a low of $42 million that year. At the same time, critics of
the company pointed to an emerging pattern: that in many of the
countries Herbalife entered, sales would surge initially, then plunge,
often in the face of government scrutiny. Nonetheless, Herbalife continued to grow strongly through the first
half of the 1990s. Retail sales doubled to $405 million in 1992 and
jumped again to nearly $700 million in 1993. Although 80 percent of
sales still came from international markets, Herbalife's U.S. sales
began to climb, reaching $85 million. Buoyed by this growth, Herbalife
filed for a secondary offering of five million shares in 1993. The company came under attack again, however. An Herbalife program
introduced in 1992 called Wealth Building--in which newly recruited
distributors could achieve supervisor status, with an immediate discount
of 50 percent, if they made a first purchase of $500--was seen as
skirting the edge of an illegal endless-chain scheme. The company's
newly introduced Thermojetics Program of products also was criticized by
the FDA and others for containing the Chinese herb ma huang, which
contains ephedrine. In response to a Canadian threat to ban
Thermojetics, the company agreed to reformulate the product. Despite
this publicity, sales of Thermojetics were credited with raising
Herbalife's retail sales still higher, to $884 million in 1994 and to
$923 million in 1995, for net earnings of $46 million and $19.7 million,
respectively. The company's international operations also was faced with problems.
In France, claims that a group of Herbalife's distributors were part of
an unpopular religious group led to falling sales in that region. In
1995, the firm suspended the sale of Thermojetics Instant Herbal
Beverage in Germany after receiving complaints from government agencies
about the product. The suspension led to a sharp increase in product
returns and distributor resignations as well as a decline in sales of
related products. The firm continued to thrive, however, despite the conflicts in which
it was involved. In 1994, the company began developing a new line
entitled Personal Care, which focused on health awareness. The products
were launched in 1995 and included The Skin Survival Kit, Parfum
Vitessence fragrances, and Nature's Mirror, a line of facial products.
Herbalife also entered the catalog sales market in 1994 and developed
'The Art of Promotion' catalog that was used by distributors and
complemented existing product lines. Continued Growth in the Mid-1990sThe company entered the mid-1990s focused on international expansion
as well as continuing its growth in existing markets. By 1996, Herbalife
was operating in 32 countries and international sales accounted for
more than 70 percent of total sales--sales in the United States,
however, declined by 16.2 percent to $279.6 million. The firm also began
restructuring its European distribution system. It closed four
warehouse facilities, leaving five in operation, and established new
sales centers for distributor meetings. The company also opened a main
sales office in the United Kingdom that could process telephone orders
from European distributors. The firm came under fire once again in 1997 when Clint Fallow, a
former distributor, filed suit against Herbalife claiming that the firm
withheld earned income. The suit, which Fallow detailed on a public web
site, garnered negative attention and was the first of many filed
against the company by disgruntled distributors. Nevertheless, the company forged ahead, securing $54.7 million in net
income in 1997, a 22.2 percent increase over the previous year. By
1998, the firm had expanded into Turkey, Botswana, Lesotho, Namibia,
Swaziland, and Indonesia. The next year, Hughes set plans in motion to
take the company private in a $17 per share buyout plan after claiming
that Wall Street was undervaluing his firm. Although the Herbalife board
approved the offer, many shareholders claimed that the offer was not
fair and filed suit against the firm. Problems Continuing into the New MillenniumHerbalife continued to battle problems into the new millennium. The
use of ephedrine in its products raised issues as the FDA linked heart
attacks and strokes and even death to its use. Then in April, Hughes
abandoned his buyout efforts when he was unable to raise enough capital
to fund the deal. The firm settled the suit with shareholders and stock
price faltered, trading around $10 per share after the announcement--in
spring 1998 the stock had traded at $27 per share. The company was again faced with hardship when in May 2000, Hughes
died unexpectedly. Rumors spread about his death claiming that Hughes
himself had not been a picture of health and had died of an alcohol and
antidepressant overdose. The MLM Watch, a group that investigates
marketing schemes, also claimed that the story about Hughes's mother
dying of an overdose of diet pills was false and that newly elected
Chairman John Reynolds was not really Hughes's father, as the company
claimed. For the first time in five years, sales declined and the firm
recorded a 35.1 percent decrease in net income over the previous year. The company moved forward as it had done in the past when faced with
adversity. In 2001, Herbalife expanded into Morocco. Newly elected
President and CEO Christopher Pair stated in a company press release,
'The addition of Morocco as our 50th market represents an important
milestone for Herbalife. We are committed to strengthening our global
presence by making our products available around the world and extending
new business opportunities for our distributors.' Despite continuing
negative publicity surrounding the company, management continued to
focus its future efforts on growth markets. Principal Competitors: Alticor Inc.; GNC Inc.; Nu Skin Enterprises Inc.

Herbalife is one of the largest nutritional supplement companies in the
world. It relies on a network of independent distributors to sell its
products and to recruit new sales personnel. Since its founding nearly
three decades ago, Herbalife has faced persistent controversy based on
unsupported product claims and a sales structure that many believe
resembles a pyramid scheme. The company is based in Los Angeles, and had
sales totaling $2.4 billion in 2008.

Mark Hughes

The history of Herbalife dates back to Lynwood, California,
in the 1970s. A 16-year-old man named Mark Hughes found himself in
trouble with drugs and was sent to a residential home for troubled
teens. Here Hughes learned he was a natural salesman, and began selling
raffle tickets to support the residence. When he was 18 he was hired as a
marketing consultant for the organization. That same year his mother
died of a diet-pill overdose, prompting Hughes to explore safer
weight-loss methods based on herbal supplements.

Herbalife Founding

In 1979, Hughes partnered with Richard Marconi, a doctor
with a Ph.D. in nutrition. Hughes and Marconi developed an herbal line
of weight-loss supplements known as Herbalife and began selling their
products out of their cars. The Herbalife plan involved consuming only
one meal a day. This meal was supplemented with up to 20 vitamins and
supplements. By the end of the first year the company had sales
exceeding $2 million.

Multi-Level Marketing

Throughout the mid-1980s, Herbalife sales soared, with gross
revenue topping $500 million a year by 1985. The company relied on a
network of distributors to sell its product, with many of these
distributors earning commissions for finding new salespeople. In 1984,
the U.S. Food and Drug Administration released a report outlining
complaints against Herbalife. These included accusations of multi-level
marketing (MLM) as well as false medical claims.

Legal Troubles

In 1985, the Canadian Department of Justice filed a number
of claims against the company related to false advertisement and
unproven medical claims. Herbalife fought back by filing a lawsuit
against the FDA and the U.S. Health and Human Services Division,
accusing them of defamation. The FDA responded with a civil suit against
Hughes himself, blaming him for five deaths associated with his product
line. These stories made headlines and greatly affected the company's
sales.

The Late 1980s and Today

Hughes reached a settlement on the FDA suit in 1986, and the
company posted a $3 million loss for the year. As part of the
settlement, Herbalife was forced to discontinue a number of products and
replace some ingredients linked to illness and death. Hughes pushed on
and took the company international, building to sales of $700 million by
1993. By 2003, sales had reached $1.3 billion. Though the company is
still subject to frequent FDA and MLM inquiries and lawsuits, it has
managed to survive and create new products aimed at boosting sales.---------------------

Odom Fanning

Opening two days of hearings, Senator William V. Roth, Jr.
(R-DE), chairman of the Senate Permanent Subcommittee on Investigations,
made it clear that their purpose was not to "get" Herbalife
or any other product, but resulted from five months of investigation
into weight reduction products and plans of all types. The Subcommittee
is authorized to investigate the efficiency and economy of all
branches of the government and also has jurisdiction over "all
aspects of crime and lawlessness within the U.S. which have impact
upon or affect the national health, welfare, or safety."Roth acknowledged that following announcement of the hearings
(held in Washington, D.C., May 14th and 15th), he had received
a "very large number of phone calls and letters from individuals
who are very satisfied with the Herbalife products, and have lost
large amounts of weight." Many of these correspondents, and
an estimated 3,000 Herbalife distributors who marched on the second
day, were obviously on the defensive. So was the Food and Drug
Administration, for, as the senator put it, the purpose of the
hearings was "to find out if the public is being adequately
protected when it buys and consumes diet products."In his opening remarks, Roth made a distinction between "miracle
pills and creams," tinted sunglasses, plastic ear forms and
other "patently fraudulent products" and the very low
calorie (VLC) products that can actually produce weight loss but
may not be safe. His major concern with the VLC products, he specified,
"is with what the Food and Drug Administration is doing and
what it is not doing, particularly when serious questions have
been raised both within the FDA and outside this agency about
the safety of such products....We are dealing with a multi-billion
dollar industry which produces items ingested into the human body.
Yet the FDA has been reticent to involve itself in low calorie
diets. I want to know why, because I think the public deserves
to know conclusively about the safety of individual products now
in the marketplace."On the first day Roth's subcommittee heard testimony from scientists
and VLC product users, all of whom submitted written statements
as well. Most of the scientists favored more regulation of such
dietary products; the users were pro and con.One scientific witness was Judith S. Stern, Sc.D., professor
of nutrition and director of the Food Intake Laboratory at the
University of California, Davis. She conceded:

The inadequacy of traditional medicine to provide a permanent
cure for obesity has given rise to an entire industry of entrepreneurs
who claim to be able to relieve the frustrations of the overweight.
The ironic tragedy is that most diets work-at least initially-when
they are followed. However, fad diets are usually quite restrictive
in their food choices, may have unpleasant side effects, and
most people cannot follow them for any length of time. In addition,
when daily calories are restricted below 1,200, it becomes difficult
to satisfy all other nutrient needs.

Dr. Stern also made the distinction between "miracle cures"
and VLC products. Products in the former category include the
hormone cholecystokinin (CCK), claimed to decrease hunger, and
various amino acid pills, said to release growth hormone. Both
have been promoted with false claims based on legitimate scientific
discoveries that were overgeneralized and misrepresented, she
noted.Debunking claims that grapefruit or grapefruit extract can
act in a catalytic manner enhancing breakdown of fat, Dr. Stern
described her testimony last year which helped the U.S. Postal
Service stop sales of Super Grapefruit Pills by a California company.
Noting that these pills contained glucomannan, she reported that
in 1980 she had conducted a double-blind study in which the test
group received one gram of glucomannan while the control group
was given a placebo. Both groups were placed on a behavior modification
program. Both groups lost weight, she noted, but there were no
statistically significant differences in hunger ratings or weight
loss between them.Dr. Stern also zeroed in on kelp/lecithin/cider vinegar/vitamin
B6 combinations found in dietary products since 1974. Iodine-rich
kelp is potentially harmful to a small number of individuals in
whom high amounts of ingested iodine can cause thyroid trouble.
The other three ingredients are worthless, she noted.Another expert witness was Varro E. Tyler, Ph.D., professor
of pharmacognosy (the science of medicines from natural sources)
and dean of Purdue University's School of Pharmacy and Pharmacal
Sciences. Here is my summary of Dr. Tyler's detailed analysis
of various Herbalife products contained in the lengthy packet
of written material released by Roth's subcommittee to the press:

Slim and Trim Formula #1 (46 cents per day), described
in the sales literature "as a balanced protein powder made
from natural vegetable soy, casein and whey protein." Tyler
said the product is falsely represented in company literature
because there is nothing about a protein powder, per se, that
will curb the appetite any more than an equivalent amount of
protein derived from eating lean meat, nuts, or the like. Further,
no protein powder will "cleanse the system" or facilitate
"burning excess calories." It will supply needed daily
nutrients, but no more effectively than a low-calorie diet, carefully
balanced for carbohydrates, minerals, and vitamins-as well as
protein.

Slim and Trim Formula #2 (21 cents per day), described
by the Herbalife organization as a special blend of 14 herbs
plus kelp, lecithin, vitamin B6, and cider vinegar designed to
cleanse the digestive system and naturally help curb the appetite.
Tyler said that, of its many herbal ingredients, none is actually
present in sufficient quantity to produce significant physiological
effects by itself. But he noted that four ingredients-senna,
cascara sagrada, dandelion root, and kelp-might work together
to exert a laxative effect in sensitive individuals.

Slim and Trim Multivitamin and Multimineral Formula #3
(23 cents per day) is a fairly standard vitamin/mineral preparation
with some herbal products added in such tiny amounts that they
exert no significant effect. Unless vitamin deficiency was present,
Tyler noted, the product would be a complete waste of money.

Slim and Trim Linseed Oil Formula #4 (10 cents per
day) contains small amounts of linseed oil but has no advantage
over less expensive vegetable oils ordinarily used in the kitchen
of the average home. (Moreover, as noted by the next witness,
the amount found in the formula will be obtained in food consumed
in just one balanced meal per day.)

Cell-U-Loss (43 cents per day) is described in Herbalife
literature as a product designed to attack cellulite, promote
circulation, and eliminate excess fluids, is recommended for
use with the Slim and Trim formulas. Tyler noted that its tiny
amounts of herbs would at most cause a slight diuresis (output
of body water), but would have no effect whatsoever on appetite
or body fat.

Herbal-aloe is said to aid digestion and cleanse the
system. Although uncertain of the type of aloe contained in this
product-which may be a laxative-Tyler expressed deep concern
over two of its other herbal ingredients. Comfrey, he said, is
a known carcinogen, shown to produce malignant tumors in the
livers of rats when included in their diet. And the active constituent
of chapparal, nordihydroguaiaretic acid (NDGA), was removed from
the FDA's GRAS (Generally Recognized As Safe) list many years
ago after it was shown to cause cysts and kidney damage in rats.

N.R.G. (Nature's Raw Guarana) (80 43 cents per day),
claimed to increase energy, aid in mental alertness and produce
a nutritional lift, is sold in tablets that contain small amounts
of granular guarana, the seed of a South American plant known
to contain about 5% caffeine. The amount of caffeine in the recommended
dose of N.R.G. is about the same as that in a cup of strong coffee-but
the presence of caffeine is not revealed in product labeling
or literature. Thus, individuals sensitive to caffeine might
be unwittingly harmed.

Schizandra Plus tablets are said to help combat stress
and damage leading to premature aging. Although he suspected
that the dosage of its ingredients was too low to exert pharmacological
effects, Tyler indicated that tests are needed to determine whether
chemicals extracted from schizandra can protect or harm the liver
[see NF 2:29].

Tang Kuei (50 cents per day), said to help establish
menstrual regularity and provide "herbal nutrition"
for the whole body, contains dong quai (also known as dang gui
and pinyan) and chamomile. These drugs -- used in traditional
Chinese medicine -- have not been proved by Western standards.
Tyler noted that even if they are effective, the amounts contained
in Tang Kuei are far below those used in China. Moreover, under
federal law, Schizandra Plus and Tang Kuei are unapproved new
drugs that are not legal to sell in the United States.

Overall, Tyler objected that

Some Herbalife products may well be toxic, at least to some
consumers.

Herbalife literature and word-of-mouth recommendations build
up false hopes in consumers, most of whom are not able to benefit
from the placebo effect.

It is particularly deceptive because they lead the public
to believe that Herbalife products "contain a lot of wonderful
herbs with marvelous health-giving properties when the amounts
present in the products are too small to have any significant
physiological effects in normal persons.

Consumers are thus paying good money for products which have
no proven value.

Many of the same points were reiterated in an analysis of the
various Herbalife formulas by F. Xavier Pi-Sunyer, M.D., associate
professor of Medicine, Columbia University College of Physicians
and Surgeons, and a division chief at St. Luke's Roosevelt Hospital
Center, New York City."With very rapid weight loss, and particularly with diets
low in carbohydrate, there is an early diuresis, that is, loss
of water via the urine. This accounts for much of the weight loss
of crash diets and much of this water is reaccumulated when the
diet is stopped," said Dr. Pi-Sunyer. "With this water
loss, great amounts of sodium, potassium, and chloride are lost,
as well as lesser but substantial amounts of calcium, magnesium,
and other minerals. These must be replaced. If they are not, the
electrical integrity of biological membranes may be lost, and
one outcome of this may be cardiac arrhythmias."Because dieters wish "to get on with it," there may
be a tendency to take only the protein preparation, without supplementing
it, as sometimes recommended, by a meal to bring the daily intake
to at least 800 to 1,000 calories (of which 300 to 400 may be
provided by the dietary product). Consumers also may ignore the
limited period, say four weeks, recommended by some diet purveyors,
and incur added risk by consuming the preparation for a longer
time, said Dr. Pi-Sunyer.He also reported that a colleague, Theodore B. Van Itallie,
M.D., had reexamined data of the victims of the liquid protein
diets of 1977-1978 and found that "the less fat you are the
more dangerous these diets are for you, the more likely you are
to lose life-requiring protein, and the more at risk of dying
you are. Since these preparations are bought without restriction,
many people take them who are not very fat, and these people seem
to be particularly at risk."

Two of the four laypersons who testified were constituents
of Senator Roth's-one for Herbalife, the other against. Patricia
Stombaugh, of Smyrna, Delaware, began taking Herbalife in August
1984. "After taking it for two months, losing five pounds
and feeling much better," she was asked by friends "for
more information about Herbalife." She soon became a distributor.
She and her representatives since have sold it to over 300 people.
"Herbalife has worked for me and my customers," she
told Roth and the subcommittee. "I believe the people who
said they felt better using the Herbalife products are stating
the facts: their health problems improved through weight loss
and sound nutrition. They are not saying that Herbalife is like
a medicine that cures a disease. No one I know has ever claimed
this."Another user, Greg Martin, of Dover, Delaware, lost about 13
pounds in three months and "felt better than I had in years,"
after starting on Herbalife products in September 1984. He and
his wife began selling the products in October, eventually building
a customer list of 100 with ten distributors. But most of his
customers suffered from constipation when using Slim and Trim
Formulas, and 10 -15%t had other problems, he reported. One man
who had had two previous heart bypass operations was taking Herbalifeline
because Martin "understood from the literature that it was
good for heart problems. This man became extremely constipated."Because he was unable to get answers to his questions from
Herbalife headquarters, Martin stopped selling its products to
retail customers at the end of February. "I do not want to
be associated with a company who claims its products are safe
for everyone to use and then will not deal with [health] problems,"
he testified. He expressed the conviction "that diet products
and food supplements can do a lot of good. I would not want to
see them prohibited." He suggested, however, that standards
be established and that the FDA "enforce these standards
so that the public can be confident that these products are safe."The final two lay witnesses testified to personal tragedies.
Bernard Lehman, of Anaheim, California, formerly from a town near
Nashville, Tennessee, said that he is not able to work because
he has Hodgkin's lymphoma, a form of cancer. A few months ago,
while "basically bedridden," he claimed that a distributor
in Tennessee told him and his wife that she could lose weight
taking Herbalife products, that both could earn needed income,
and that "the Herbalife products would help to cure my cancer."Lehman named the distributor and charged, "He told us
this orally and showed us some brochures which said this"
in writing. "However, he gave us different brochures without
this information and said that he only had one copy of the special
brochure, and he had to keep it for his use." Lehman summarized
by saying that the distributor "basically said that the Herbalife
products would act as a cure-all."Although he and his wife had "bad reactions" to the
Herbalife products, they continued taking them "because we
believed that we could make lots of money and we thought our own
bad reactions to taking the products were unusual." They
spent about $1,800 for inventory and publications and sold about
$100 worth of Herbalife products before asking to get out and
get their money back. They eventually received $1,000 from the
distributor and still have $700 worth of product they "would
just like to get rid of...and forget about."Cynthia Guillaume Lee, of New Orleans, told the pitiful story
of her late husband, Bivian Lewis Lee, Jr., who had retired as
a National Football League player in 1976. He became a Herbalife
distributor in October 1984 because "the extra money sounded
real good," said Mrs. Lee. Although he was not overweight
and "was very much against taking any kind of diet product,"
he began taking a Herbalife product because "he said that
if he was going to sell it, he would at least try it out."Two weeks later, Bivian, age 35, was dead. His widow testified:

I know that I'm not a doctor. I know that I'm not qualified
to give medical opinions. But I do know that my husband was a
perfectly healthy man. I saw him deteriorate from the perfectly
healthy man to his death. And it all began when he started taking
Herbalife. I want to tell what happened to me-it's not easy for
me to do this-because I want this subcommittee, or the Federal
Food and Drug Administration or somebody to investigate why my
husband was alive and well until he started on the Herbalife
products and now he's dead. I want to encourage the subcommittee
to look into this so that other young mothers won't find themselves
in my position.

Mrs. Lee submitted an affidavit by Dr. Van Itallie, who had
reviewed the autopsy protocol prepared by the Orleans Parish Coroner's
Office and other records relating to Bivian Lee's death. The affidavit
cites an article Van Itallie co-authored, entitled "Cardiac
dysfunction in obese dieters: a potentially lethal complication
of rapid, massive weight loss" [American Journal of Clinical
Nutrition 39:695-702, 1984]. The article discusses the cases of
17 obese but otherwise healthy persons on VLCs who died of cardiac
arrhythmia. "Basically," the affidavit says, "severe
restriction of caloric intake causes the body to ulitize and deplete
its protein. The heart is a muscle, made of protein, and it is
not spared . . . . depletion of protein from the heart may be
followed by cardiac arrhythmia and death. I refer to this as the
'liquid protein syndrome', but it may develop from any drastic
reduction in caloric intake. My thesis further holds that persons
with lesser stores of body fat are more likely to experience the
cardiac dysfunction. Fatter dieters seem to survive longer because
they are better able to conserve their body protein."Van Itallie found this thesis consistent with Bivian Lee's
case, particularly because he was "persuaded by Lee's Body
Mass Index, indicating that he had lesser stores of body fat."

This article was published in the September 1985 issue of Nutrition
Forum, when Mr. Fanning edited and published a newsletter
called Con$umer New$weekly. Before that, he was a science
writer for The Atlanta Journal and director of information for
the U.S. Centers for Disease Control and Prevention. Bivian Lee's
lawsuit was settled out of court for an undisclosed sum which
was undoubtedly substantial.